BUILD BACK BETTER BILL (infrastructure Investment and Jobs Act): WHAT’S IN IT FOR REAL ESTATE? $90 Billion for Section 8 $80 Billion for Public Housing $10 Billion for First-Time Homebuyers $5.3 Billion for Rural Housing $4.3 Billion for the “Unlocking Possibilities Program” $4 Billion for Distressed Multifamily Housing $4 Billion for Flood Resilience $2.8 Billion for Minority-Owned Businesses The Build Back Better bill also includes significant money for transportation improvements, re-routing streets and removing lead paint from housing, all of which could have significant effects on real estate markets. Twenty-five billion is also going to the Small Business Administration including money for the popular 7(a) microloan program, which serves many real estate businesses. (Note: SBA inspector general suggests further evaluation of program.) Also notable is what the house bill did not end up including. The bill fails to close two tax loopholes—the so-called carried interest loophole and like-kind exchanges. The carried interest loophole allows taxpayers to pay a much lower rate on capital gains compared to straight income, and like-kind exchanges involve deferring taxes when exchanging investment properties. NAR has lobbied against changing these practices, which largely benefit very wealthy individuals, arguing that they are not loopholes and promote business growth, while some politicians on both sides of the aisle see them as contributing to massive wealth inequality. 

Real Estate News in Metro Atlanta and Beyond

BUILD BACK BETTER BILL: WHAT’S IN IT FOR REAL ESTATE?

no, not really…it was spent in Afghanistan - was it worth it? well, here are 10 bad examples of "waste, fraud, and abuse"…could have been spent on affordable housing and jobs programs. HUNDREDS OF BILLIONS WERE SPENT BY THE US IN AFGHANISTAN. HERE ARE 10 OF THE STARKEST EXAMPLES OF 'WASTE, FRAUD AND ABUSE' In addition to the $85 billion of military equipment and weapons left behind in Afghanistan....here are som less costly but inane expenditure of us taxpayer and government debt. Tarakhil power plant cost $335 million to build, and had an estimated annual fuel cost of $245 million. The most recent SIGAR assessment said at best it was used at just 2.2% capacity, as the Afghan government could not afford the fuel. Pentagon chose the G222 - Six years after the procurement was launched, the 16 aircraft delivered to Afghanistan were sold for scrap for $40,257. The cost of the project: $549 million. 64,000-square foot Marine HQ control center - It cost $36 million, was never used, and seems to have been later stripped by the Afghans, who also never appeared to use it. Uniforms camouflage pattern, "Spec4ce Forest" cost $28 million more than a more appropriate pattern. The US spent $1.5 million a day on counter-narcotics programs (from 2002 to 2018). Opium production was, according to the last SIGAR report, up in 2020 by 37% compared to the year before. This was the third-highest yield since records began in 1994. $249 million being handed out to contractors, but only 15% of the road being built An extensive hotel and apartment complex was commissioned next to the US Embassy in Kabul - "the $85 million in loans is gone, the buildings were never completed and are uninhabitable, and the U.S. Embassy is now forced to provide security for the site at additional cost to U.S. taxpayers." Task Force for Business and Stability Operations (TFBSO) expanded from Iraq to include Afghanistan in 2009, for whose operations in Afghanistan Congress set aside $823 million.  Over half the money actually spent by TFBSO -- $359 million of $675 million -- was "spent on indirect and support costs, not directly on projects in Afghanistan," SIGAR concluded in an audit. 510 projects they had been given coordinates for, did not exist in those locations.The audit said that USAID and the Afghan ministry of Public Health could only provide "oversight of these facilities [if they] know where they are." USAID declined to comment. SIGAR was able to review $63 billion of it -- nearly half. They concluded $19 billion of that -- almost a third -- was "lost to waste, fraud, and abuse." 

Hundreds of Billion$ have been spent on affordable housing in the United States over past 30 years

What Is a Living Trust in Real Estate? A living trust is a legal document that makes it easier for you to pass along property, accounts and other assets to your loved ones after you die. It allows your assets to pass along directly to your designated beneficiaries without needing to go through the courts, eliminating the costly and lengthy probate process. Even though the living trust holds these assets, you are still considered in possession of them while you’re alive (assuming that you named yourself the trustee). This means that you can move assets in and out of the trust as you see fit, and if you have a revocable trust, you can even cancel or change it at any time. A living trust is a beneficial financial product for many reasons.- bypass probate court, you remain control after death, and remains private. How a Living Trust Differs from a Will - living trust is considered “in effect” even while the grantor is still alive. A will, however, only goes into effect after the grantor passes away. A will goes through the probate courts, while a living trust skips the probate process altogether. During probate, your will is filed as public record. Your living trust and its contents, however, can be kept entirely private. Any assets without a named beneficiary (such as a life insurance policy) will pass through probate, even if you have a will. This process can take months or years, while your loved ones wait to receive their share of your estate. With a living trust, however, assets can be passed down immediately. Creating a will can be a cheap – or even free – process. Establishing a trust, however, is a bit more complex and can cost hundreds or even thousands of dollars. You can make requests and name stipulations in your will. However, your heirs don’t necessarily have to follow them after you’re gone (depending on the conditions and even your state). With a trust, you can dictate how and when assets are disbursed. You’ll also have a trustee around to manage the process. Making a Living Trust: Can You Do It Yourself?

What Is a Living Trust in Real Estate?

 Small Business Administration Microloan Program - Started by Congress in 1991, the Microloan program is designed to assist women, low-income, veteran, and minority entrepreneurs and small business owners by providing them small-scale loans for working capital or the acquisition of materials, supplies, or equipment. In FY2020, Microloan intermediaries provided 5,890 microloans totaling $85.0 million. The average Microloan was $14,434 and had a 6.5% interest rate. The program’s critics argue that it is expensive relative to alternative programs, duplicative of the SBA’s 7(a) loan guaranty program, and subject to administrative shortfalls. The program’s advocates argue that it assists many who are not served by the private sector and is an important source of capital and training assistance for low-income, women, and minority business owners. e Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which, among other provisions, appropriated $17 billion to pay the principal, interest, and any associated fees that are owed on an existing 7(a), 504/CDC, or Microloan that is in a regular servicing status for a six-month period starting on the next payment due date. the Microloan program’s estimated borrower default rate is about 7%.  Microloans in FY2020 were most commonly used for working capital (80.3%), equipment (20.5%), materials (12.0%). Critics of the SBA’s Microloan program argue that it is duplicative of other available programs, expensive relative to alternative programs, and subject to administrative shortfalls. The program’s advocates argue that it provides assistance that “reaches many who otherwise would not be served.  Also, it is expensive relative to other SBA programs, with total administrative costs of about $7,517 per small business assisted in FY2019, compared to $1,986 per small business assisted in the SBA’s 7(a) loan guarantee program. 2017, the SBA’s Office of Inspector General (OIG) released an audit of the SBA’s administration of the Microloan program:  (1) SBA’s oversight poor - didn't watch how funds were spent unless loan defaulted; inadequate program staffing;  12% default rate; duplicate loans and those in excess of upper loan limits; and no measurement of output performance. 2019, GAO examined the Microloan program and recommended that the SBA: Better advanced planning to determine what data is needed to evaluate performance; Define terms and instructions are comprehensive enough to collect data; develop performance targets; and consider interagency collaboration and information sharing. Four SBA OIG recommendations: (1) continue efforts to improve the information system to include outcome-based performance measurements and ensure the data captured can be used to effectively monitor the Microloan Program compliance, performance, and integrity; (2) develop and implement a site visit plan to comprehensively monitor microloan portfolio performance and ensure program results can be evaluated program-wide; (3) update the Microloan program’s SOP 52 00 A to clarify requirements regarding evidence for use of proceeds and credit elsewhere; and (4) update the microloan reporting system manual to reflect current technology capabilities. Source:  Small Business Administration Microloan Program

Small Business Administration Microloan Program

What are my options if my new house turns out to be a lemon? 

 FHA LOAN LIMITS INCREASED!  FHA increased loan limits on multi family housing another $8 billion per year on each enterprise Fannie Mae and Freddie Mac…totaling $156 billion/year in multi family properties.  And word is that the $412,850 FHA single family loan limit will go up substantially higher than this level.  Both actions are designed to increase housing affordability in low down payments and more homes which qualify for FHA. Zillow Is Bringing Artificial Intelligence to Real Estate - Zillow is working on called a floor plan generator, where they can take the images people upload and generate an actual floor plan with a house for you and find the house you're really looking for...combining that AI with their other AI algorithm (Zestimate). may result in making actual offers on homes.    Don't hold your breath. Q2 Title Insurance Premiums of $6.5 Billion Break Records - That's alot of cash corresponding to an approximate 3.5% payout ratio...or approximately $222 million - but for what - errors or overlooked issues that weren't corrected before closing?  Do we have full transparency in the title insurance industry with Billions of dollars collected and only millions in payouts? However, title insurance companies didn’t exactly lose during this period. During the first six months of 2021, the industry overall paid out $221.1 million in claims, down from $232.9 million from the same period a year prior.  Maybe we ought to consider modeling after Iowa’s title insurance which is far cheaper and requires title defects to be corrected prior to closing. Curbio will gift a First American home warranty to your clients who complete a Curbio project!. Curbio is the leading home improvement company for Realtors® and their selling clients in the US, with a fast and effortless process to repair and update those areas that will get the largest renovation ROI.  Tech Leaders Discuss Artificial Intelligence and its Impact on the Real Estate Industry - Chatbots and voice assistants are extremely popular right now as they allow real estate professionals to provide around-the-clock support that doesn't require a human," said Vin Vomero, CEO of Foxy AI. "Foxy AI's ‘Remodel It' uses computer vision to help consumers get instant and customizable home renovation estimates by analyzing the photos on listing websites by ZIP code. Some companies avoid using A.I. because of the perceived costs and resources required to use it, a lack of trust in A.I. products, the difficulty in explaining what it does behind the scenes and a fear of an A.I. takeover related to job displacement," said Julianne Heller, data scientist at NAR. 

Multiple topics - FHA loan limits increase - Zillow's new app - Highest title insurance profits ever - Curbio - Artificial Intelligence

Federal agencies take 7 steps to improve affordable housing supply and reduce homelessness Increasing the funding of low-income housing tax credit investments through Fannie Mae and Freddie Mac to $852 million each annually. Sharing specific details about the HOME-American Rescue Plan so more than 600 eligible communities can start accessing funds designed to address local homelessness. Providing communities with five percent of their HOME-ARP grants upfront to support planning activities for local affordable housing projects. Restarting the Federal Housing Administration (FHA) Section 542(c) Housing Finance Agency Risk-Sharing Program with the Department of Treasury’s Federal Financing Bank. The program gives state housing finance agencies access to low-cost capital that aids in the building and development of affordable housing units where they are needed. Removing the dollar cap from the Section 542(c) program so the FHA can provide firm approval letters for HFA-underwritten mortgages that meet program standards. Making more single-family homes available to individuals, families and non-profit organizations by limiting the sale of FHA-insured and HUD-owned properties to large investors. Sharing HUD research on innovative strategies state and local governments use to remove regulatory barriers to affordable housing and increase housing supply. 

Federal agencies take 7 steps to improve affordable housing supply and reduce homelessness

Home Buyers Facing Higher Prices, Unexpected Cancelled Contracts in New Home Builds

Why are new home sale contracts being terminated by builders

Inflation forces homebuilders to take it slow, raise prices - Rising costs and shortages of building materials and labor are rippling across the homebuilding industry, which accounted for nearly 12% of all U.S. home sales in July. Construction delays are common, prompting many builders to pump the brakes on the number of new homes they put up for sale. As building a new home gets more expensive, some of those costs are passed along to buyers. Lumber futures jumped to an all-time high $1,670 per thousand board feet in May. They've since dropped to $634, about 10% higher than a year ago. (Have builders passed this lower cost onto buyers after raising their prices to compensate for the earlier limber price increases?) But wholesale prices for a category of homebuilding components that includes windows, roofing tiles, doors and steel, increased 22% over the last 12 months. (Question:  How much of that increase in price is reflected in the home price and will some be absorbed by builders, or all passed along to home buyers so GPM can be retained?) A chronic shortage of skilled construction workers has worsened during the pandemic, forcing builders to factor in higher labor costs. (Paying people not to work is one reason, then shortages of crews and sporadic building material deliveries require sudden needs to hire more temporary crews at higher costs to get homes completed.)

Inflation forces homebuilders to take it slow, raise prices

Turcker Carlson on California Real Estate Laws destroying the fabric of Single Famly Homes - SB9 and SB10, that will abolish the suburbs in the state of California. The state that invented the suburbs. Those bills were endorsed by the California Building Industry Association 3 Zoning Changes That Make Residential Neighborhoods More Affordable - No more SFR Only - ADUs (Accessory dwelling units also known as granny flats, English basements, secondary suites, casitas, and ohana houses) - housing people not Cars A call to examine United Methodist real estate - My estimates are that the next several years will see the closing of as many as 100,000 houses of worship throughout the United States, up from an estimated 3,750 to 8,000 per year now. While it is easy to blame COVID-19 for the upcoming closings, most of the churches were on the brink of shuttering pre-pandemic.

Tucker Carlson exposes real estate companies 'wrecking' America - Coming to your state?

Do swimming pools add value to real estate?

Swimming pools - good or bad investment?

CoreLogic history on Wikipedia - Their fingers are in alot of places...and provide alot of data to real estate community. 

CoreLogic - Where did it start and where is it now?

Starting Oct. 1, the federal government plans to start gradually reducing subsidies for its flood insurance programs, pushing up rates for homeowners, according to the New York Times. For the first time, the government will also take into account a home’s size, which means the owners of large beachfront properties are in for even larger rate hikes. FEMA (Federal Emergency Management Agency) manages the creation and revision of flood maps across the United Stated. NFIP (National Flood Insurance program) is managed by FEMA that enables homeowners, business. owners and renters in participating communities to purchase federally backed flood. insurance as an insurance alternative to disaster assistance.  Along with this responsibility, FEMA has to use a formula or pricing strategy guideline for flood insurance. FEMA Risk Rating 2.0 is the new pricing methodology. This methodology leverages industry best practices and cutting-edge technology to enable FEMA to deliver rates that are actuarily sound, equitable, easier to understand and better reflect a property’s flood risk.   In 2012, Congress passed the Biggert-Waters Flood Insurance Reform Act to phase in full-risk prices for most NFIP policyholders over time. However, the act resulted in huge increases in premiums…some as high as $63,000.   Only an act of Congress can change these congressionally mandated statutory protections. Congress also strictly limits how much grandfathered rates can increase in a single year (generally no more than 18%) and how much coverage can be offered under an NFIP policy ($250,000 for a residential building), which will not change under Rate 2.0. Risk Rating 2.0 does not affect the grandfathered rates for newly mapped or pre-Flood Insurance Rate Map (FIRM) properties or rate discounts under the Community Rating System (CRS). Only an act of Congress can change these congressionally mandated statutory protections. Congress also strictly limits how much grandfathered rates can increase in a single year (generally no more than 18%) and how much coverage can be offered under an NFIP policy ($250,000 for a residential building), which will not change under Rate 2.0. NAR’s recent townhall with FEMA regarding the National Flood Insurance program’s (NFIP) new pricing methodology Risk Rating 2.0. (Note: RR 2.0 only affects NFIP policies. However, there are a number of private flood policies that aren’t affected.) Risk Rating 2.0  Discussion from FEMA - Since the 1970s, rates have been predominantly based on relatively static measurements, emphasizing a property’s elevation within a zone on a Flood Insurance Rate Map (FIRM). FEMA is building on years of investment in flood hazard information by incorporating private sector data sets, catastrophe models and evolving actuarial science. Phase out of flood insurance subsidies could upend coastal real estate markets - Starting Oct. 1, the federal government plans to start gradually reducing subsidies for its flood insurance programs, pushing up rates for homeowners, according to the New York Times. New policies beginning Oct. 1, 2021 - All remaining policies renewing on or after April 1, 2022 Update: Reasons = https://www.millionacres.com/real-estate-investing/articles/flood-insurance-is-about-to-get-more-expensive/ 

Why is your flood insurance rising starting October 1st?

The weakest projection comes from real estate research firm CoreLogic, which is forecasting just a 2.7% appreciation in the coming 12 months. Meanwhile, John Burns Real Estate Consulting and Freddie Mac—which do calendar year forecasts—project home price growth of 4% and 5.3%, respectively, in 2022.

Where home prices are going next, according to forecast models

Flyhomes wants to eliminate contingencies from real estate transactions Unlike Knock and Ribbon, Flyhomes is a real estate brokerage with salaried agents. “They are salaried but also make money per-deal based on performance, so it’s a base pay but it’s variable,” he notes. Its cornerstone program, Flyhomes Cash Offer, fronts the funds to a homebuyer so they can become a cash buyer. “They can use this bridge loan and then refinance it out into their long-term loan. For a seller, it’s even better than a cash offer, because with a cash offer, there’s no guarantee that it will close,” says Garg. They also offer Buy Before You Sell, which allows buyers to buy and move into a new home before selling their old one. Flyhomes offers a short-term loan to the buyers, and the company get the old home ready to sell and, shortly after, list it. Flyhomes has already received three rounds of funding (in addition to seed funding in 2017). The latest, Series C funding for $150 million was in June 2021 and was co-led by Norwest Venture Partners and Battery Ventures. The company is part of a wave of venture-backed real estate brokerages with alternative financing models. The Flyhomes family of companies includes Flyhomes Brokerage, Flyhomes Mortgage, and Flyhomes Closing.

Flyhomes wants to eliminate contingencies from real estate transactions

.....Welcome to my Podcasts..... Here's where I share information, news, and topics about the real estate industry; how they may affect the metro Atlanta real estate market; pose problems and solutions; and address issues that may influence decisions to buy or sell real estate. Check out my blog: abiblog.abuyeragent.com for details to these or other topics. ACCESS BROKERAGE, INC. Broker - Jim Parker 770-265-7293 jim@abuyeragent.com

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Real Estate News in Metro Atlanta and Beyond

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